Charles Ulrich, Tax Accountant, Beats IRS in Tax Dispute

Charles Ulrich, a tax accountant in Minnesota, won a lawsuit against the IRS over its method of taxing mutual company policyholders.

Ulrich, 72, filed the suit against the IRS, challenging the method the IRS has used for more than 20 years to tax shares and cash distributed by mutual life insurance firms to their policyholders when they reorganize as public companies.

Ulrich, a tax accountant for 49 years, began researching the IRS' tax practices when he received shares from two companies, Prudential and Indianapolis Life.

30 million policyholders received cash distributions when Prudential and MetLife went public. MetLife Inc. provided over $7 billion of stock to about 11 million policyholders, while Prudential distributed $12.5 billion in stock to another 11 million.

However, the IRS stated that cash distributions also were fully taxable, saying that the recipients hadn't paid anything for the shares and they owed taxes on the full amount when the shares were sold.

If a company distributed shares worth $30 and a recipient subsequently sold them at $32, under the IRS' view, they would pay taxes on all $32. Under Ulrich's interpretation, they would owe taxes only on the $2 per share gain.

Ulrich has prepared tax requests for several clients, explaining to them his theory for the IRS' method of taxing on cash distributions. One of his clients, Eugene Fisher, a trustee for a Baltimore, Md.-based trust, sued the IRS in February 2004 after being denied a refund.

Judge Francis Allegra of the Court of Federal Claims in Washington agreed with Fisher and called the IRS' view "illogical" in an Aug. 6 decision. He ordered the agency to refund $5,725 in taxes plus interest to the trust overseen by Fisher.

Ulrich will prepare refund requests for interested taxpayers, for a fee, and has posted additional information at his Web site, http://www.demutualization.org.

Click here for more Legal News on YourFindit

About YourFindit

YourFindit Community is a music, business and social networking community. It caters to individuals providing them with a wealth of tools that enable them to create their own web site within YourFindit and display their content. Members can create free profiles that include an About Me, Background and Lifestyle, Videos, Music, Blogs, Photos, their unique URL and network with other members inside the community. YourFindit provides each member the opportunity to reserve an exclusive profile displaying only ads they upload on their pages. Members have the right to sell their advertising space to advertisers.

To create your profile sign up and within minutes you too can have your People profile running your ads and building your network with new members daily. Sign up and create your YourFindit profile where your space is really Your Space

YourFindit is owned and operated by TransWorldNews, Inc.

Join the social networking community, YourFindit, and create your profile